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Pension funds: We can’t hide from the world’s problems

Achieving the U.N.’s Sustainable Development Goals is economically essential, said representatives of several big pension funds at the PRI in Person conference in Berlin last week.

Alexandra West, a portfolio head at Cbus, a $27 billion Australian super fund, says the fund’s construction worker beneficiaries are facing a housing crisis and economic inequality, reports Responsible Investor (paywall). Cbus can’t continue in “splendid isolation” from such realities, said West. “We can’t afford to leave this to others.”

Anne Simpson, sustainable investment director at CalPERS, California’s $300 billion public pension fund, called the SDGs a moral imperative and an economic necessity. CalPERS has “nowhere to hide,” said Simpson, and added that the pension fund has followed Dutch pension funds and begun to map its portfolio to the 17 global goals (see, “SDGs take hold as a universal impact investment framework”).

Dutch and Swedish pension funds have begun to shift their portfolios to align with the goals (See “European pension funds tilt capital toward ‘SDG Investing’”). “Pension funds were not interested in values-aligned investing when it was driven by aspirational, wishful thinking or, even worse, do-gooder advocacy,” wrote ImpactAlpha’s David Bank earlier this year. “They went from laggards to leaders when they assessed their portfolios against their long-term obligations, most obviously to pay out pensions to retirees decades in the future.”

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